Only days away from a critical vote on a proposed merger that could shape the future of South Korea’s largest conglomerate and economic powerhouse, the Samsung Group, two of its subsidiaries’ respective CEOs released a powerful joint statement attempting to distance themselves from a series of anti-Semitic attacks launched against one of the deal’s principals.
After American hedge fund owner Paul E. Singer, president of Elliott Associates, expressed concern over the terms of the merger between Samsung C&T and Cheil Industries — eventually taking the matter to court — things got nasty.
Both companies are subsidiaries of the Samsung Group, the multibillion-dollar conglomerate familiar to most Amer-icans as the brand behind several popular cell phones. Samsung C&T takes care of engineering and construction. Cheil is considered Samsung’s de facto holding company.
A number of South Korean publications characterized Singer as a “ruthless, greedy Jew,” with one even comparing him to Shylock, the Jewish moneylender from Shakespeare’s play, “Merchant of Venice,” in the weeks leading up to the July 17 merger vote.
In response to the attacks, both the Simon Wiesenthal Center and the Anti-Defamation League strongly urged the South Korean government and Samsung officials to condemn such allegations. Even E. Harris Baum, South Korea’s honorary consul in Philadelphia, who is Jewish, was so incensed he wrote a letter demanding an apology.
The companies responded Monday; the Korean government remained silent.
“We are a company that is committed to respect for individuals and enforces strict non-discrimination policies,” wrote Joo Hwa Yoon, CEO of Cheil Industries, and Chi Hun Choi, CEO of Samsung C&T to the ADL. “We condemn anti-Semitism in all its forms.”
“We are heartened that these South Korean corporate leaders are taking a clear and public stand against anti-Semitism,” said Abraham H. Foxman, the ADL’s outgoing national director. “This statement makes unequivocally clear that anti-Semitism has no place in South Korea and within their companies.”
With the incident so similar to recent comments by Argentinean President Cristina Kirchner, who also referenced Shylock when talking to a Buenos Aires school about how to better understand the country’s burgeoning debt crisis, some have voiced concern that such hatemongering could have spread if not dealt with forcefully.
“This is a significant step on their part,” said Rabbi Abraham Cooper of the Los Angeles-based Wiesenthal Center. “Samsung is huge not just in Korea, but internationally. But we’re still looking into some things before we say it’s over. It’s important they did respond, but the statement could’ve gone further. We just want to make sure it’s accurate.
“I’m not totally surprised, but I’m deeply concerned,” he added. “This is not the first time this has happened in recent weeks. We’re not involved with the economic issues of the merger, but what has surfaced in Argentina and South Korea is classic anti-Semitism.”
While there’s been no evidence this could lead to the kind of attacks on Jews like recent ones in Europe, the ADL says there’s no place for it in South Korea.
“Anti-Semitic stereotypes about Jews and money have a long and dark history, sowing distrust and other negative feelings towards Jews,” Foxman said in an earlier release. “These malicious myths are among some of the most widely held stereotypes about Jews and are far from harmless.”
At the heart of the issue is control of Samsung. Should the merger go through, the prime beneficiary is expected to be the family of ailing 73-year-old Samsung Group chairman Lee Kun-hee. He and his descendants currently control 42 percent of Cheil.
Lee suffered a heart attack last year and is said to be in failing health. Should the merger go through, the Lee family via Cheil could potentially save huge portions of what would otherwise be an estimated $5 billion inheritance tax.
While Cheil shares would rise, in contrast, according to Singer, the shares representing Elliott Associates’ 7.12 percent stake in Samsung C&T would be devalued.
That’s why Singer sought an injunction to block the merger, alleging it was part of a corporate takeover to ensure the company would remain in the hands of Lee’s family, particularly his grandson, Lee Jae-yong. However, a three-judge panel from the Seoul Central District Court, which ruled the merger both legal and fair, denied the motion.
Elliott disputed those findings and is hoping its appeal will be heard before Friday’s vote, which needs two-thirds approval from shareholders for the merger to go through.
“While we are disappointed with the court’s decision, we continue to believe that the proposed merger is neither fair nor in the best interests of Samsung C&T’s shareholders,” Elliott said in a statement. “We will continue to seek to prevent the proposed merger from being consummated, and we urge all Samsung C&T shareholders to do the same.”
Over the past few weeks, as the date for the vote approaches, Elliott has intensified its efforts in the media. That resulted in International Shareholder Services, a proxy advisory firm, urging other shareholders to also vote against the merger.
In response, an anti-Semitic smear campaign was laumched not only against Elliott/Singer, but also against ISS shortly afterward.
“Elliott is led by a Jew, Paul E. Singer, and ISS is an affiliate of Morgan Stanley Capital International, whose key shareholders are Jewish,” wrote Money Today, a leading South Korean financial publication. “According to a source in the finance industry, Jews have a robust network demonstrating influence in a number of domains.’”
Mediapen.com, a South Korean news site generally considered less mainstream, was even more blunt.
“The rationale for the assumption that ISS will be supportive of Elliott’s claims is that ISS, like Elliott, is founded upon Jewish money,” wrote a Mediapen columnist. “Jews are known to wield enormous power on Wall Street and in global financial circles. It is a well-known fact that the US government is swayed by Jewish capital.
“Jews are even represented in Shakespeare’s ‘The Merchant of Venice,’ in the form of a loan shark named Shylock,” the columnist continued. “Elliott’s past deeds naturally overlap with Shylock. Elliott’s nickname in the U.S. is ‘vulture,’ a greedy bird that feeds off dead bodies — Elliott withstands any ethical criticism if it can win profit.”
Both Elliottt and ISS have declined comment on these attacks. Attempts to reach the Israeli Embassy in Seoul and officials at Chabad of Korea were unsuccessful.
The incident is taking place shortly after the ADL released its Global 100 study on anti-Semitism, which showed a surprising 53 percent rate of anti-Semitism in South Korea, considerably higher than in all other Asian countries, which averaged 22 percent.
A number of authorities question the accuracy of that figure. In contrast, they subscribe to the theory than the majority of South Koreans admire Jews. Not only do Koreans try to emulate Jewish business practices, they value the importance placed on education.
Compounding that, many of South Korea’s population has become enamored by the teachings in the Talmud. In 2011, South Korean Ambassador to Israel Young sam-Ma confirmed this on Israeli public television.
“Each Korean family has at least one copy of the Talmud,” sam-Ma said on the show, “Culture Today,” as he held up a Korean version. “Korean mothers want to know how so many Jewish people became geniuses — 23 percent of Nobel Prize winners are Jewish people. Korean women want to know the secret. They found the secret in this book.”
While that would seem to contradict the ADL survey, it apparently has had little impact in terms of the proposed Samsung C&T/Cheil merger. What appears possible is that the vote will come down to the 10 percent interest controlled by the Korean National Pension Service, which has yet to announce its intentions. Others believe that even if NPS votes in favor of the merger, Singer has gathered enough outside support to kill the merger.
However, reports have recently surfaced that advisory firm Korea Corporate Governance Service has recommended NPS reject the merger. Whether that report led either directly or indirectly to the wave of anti-Semitic slurs against Elliott Associates and Singer that have followed, is uncertain.
In his letter to the Korea Times, Baum invoked the memory of American servicemen.
“By playing the race card, [the report] has offended many people, and lest he forget, there were many Jewish members of our military who fought and sacrificed their lives during the Korean War to keep the South free from the despotic rule of the North,” Baum wrote. “This language is offensive to their memory.”
Jon Marks is a staff writer for the Jewish Exponent. He can be reached at email@example.com.